To ask the Secretary of State for Education, pursuant to the Answer of 7 December 2020 to Question 22783 on Apprentices: Taxation, where that unspent levy money is located in his departmental budget.
2 February 2021
The apprenticeship levy is collected by Her Majesty’s Revenue and Customs from all UK employers with a pay bill above £3 million. Scotland, Wales, and Northern Ireland receive a share of levy funding and decide how their allocations should be used.
In each of the 2019-20 and 2020-21 financial years, the annual budget available for investment in apprenticeships in England was set at almost £2.5 billion, which is double that spent in the 2010-11 financial year. This budget is agreed in advance with Her Majesty’s Treasury and is set at a level to fund employer demand for apprenticeships; it is not dependent on income from the levy and does not equate to the funds in employer’s apprenticeship service accounts.
When an employer draws from its levy account, it effectively draws down funding from the fixed, annual apprenticeships budget. We do not anticipate that all employers who pay the levy will need or want to use all the funds in their accounts, though they are able to do so.
Unspent levy money does not therefore feature in the department’s apprenticeship budget. The budget is not affected by the value of funds which may enter or expire from employers’ accounts each month.
Funds raised by the levy are used to support the whole apprenticeship system through the set apprenticeships budget, supporting apprenticeships in smaller employers and covering the ongoing costs of apprentices already in training.